5 Pitfalls to Avoid When Negotiating a Construction Contract

Whether you are a contractor, subcontractor, developer, or property owner, negotiating the construction contract is one of the most important steps in any building project. It is essential that the contract is written properly because it sets expectations for all of the parties involved and establishes how disputes will be handled if problems arise. While a well-drafted agreement can help keep a project on schedule and on budget, a poorly written one can lead to costly delays and legal complications. Here are some of the most common pitfalls to avoid when negotiating a construction contract, and why working with an experienced construction attorney throughout the entire process is so important.

Using a Generic, or “One-Size-Fits-All” Construction Contract

Many contractors rely on a general template agreement, or a contract that was used in past projects. This can cause problems down the road since each project is unique with its own requirements. A standardized contract can certainly provide a framework, but each project should have customized text to reflect the specific project details, site requirements, payment terms and local regulations. Our attorneys can review and modify template construction contracts to ensure they accurately reflect the project details and protect your interests.

Not Providing a Clearly-Defined Scope of Work

One of the most common causes of disputes in a construction contract is an unclear or incomplete scope of work. When the language in a contract is too general it can lead to disagreements about what was or wasn’t included in the price, which can lead to costly change orders or project delays. Not everybody reads and understands things in the same way, so using text that precisely describes the materials, deadlines, and specific tasks expected of each party can help to avoid misunderstandings. Our team will work with you to ensure the scope is detailed, enforceable, and in line with the rest of the agreement in order to reduce the likelihood of disputes.

Payment Terms and Timing are Not Clear

Payment disputes frequently arise during construction projects. These disagreements can be avoided by providing a clear payment schedule that defines when payments are due and what must be completed at each stage when drafting the construction contract. When the original terms are not structured properly, it can be difficult to legally enforce your rights if payments are delayed or withheld. Our attorneys can review the payment terms to ensure that they are fair, legal and realistic for your type of project.

Your Construction Contract Lacks Detailed Instructions for Changes

Virtually every project will experience changes at some point throughout the process. As long as the contract provides clear directions for requesting and implementing these changes, problems may be avoided. However, when the terms are vague or do not specify which modifications are allowed and what charges will be incurred, disputes can be inevitable. Our attorneys have the experience to know what language to include in order to best convey the change requirements of the construction contract.

Not Properly Planning for Dispute Resolution

No matter how prepared you are or how well-written your construction contract is, there is always the chance of disputes arising. You could potentially save considerable time and expense by having an agreed-upon process to settle the dispute. This plan should provide details for negotiation, mediation, arbitration, withholding of payments or other paths to resolution. Our attorneys can help to establish fair dispute resolution strategies that align with your business goals and reduce potential costs.

Protect your Project with the Experienced Legal Support at Churchill, Quinn, Hamilton & Van Donselaar, Ltd.

A construction contract is more than just paperwork – it is the foundation of your entire project. Avoiding these common pitfalls can significantly reduce risk, improve communication, and protect your bottom line. When you work with our experienced team, we can help to ensure that your agreement is clear, enforceable, and tailored to your needs, from initial drafting through final completion. With our legal support, you can move forward with confidence, knowing your project is protected from start to finish. Contact our office at 847-223-1500 to learn more or to schedule a consultation.